Fifth Avenue was awash in American flags and marching bands played ''God Bless America.'' The parade itself, which traditionally honors Italian-Americans, was renamed ''Columbus Day Parade Honors America.''

''It's a beautiful day to be a New Yorker. I've never felt so patriotic,'' said Dana Kennedy, who watched with her 2-year-old son.

Meanwhile, at the World Trade Center, huge cranes continued to dip into a mountain of smoldering rubble, lifting several-ton sections of what were once support beams. The movement of debris released 100-foot-wide plumes of smoke from fires within the ruins. At least one body was seen being pulled from the ruins and was draped by workers in an American flag.

City officials have said 4,979 people remain missing from the Sept. 11 terrorist attacks. They have confirmed 393 deaths, including 335 victims who have been identified.

The mayor, remembering the 343 fire department members and 23 police officers lost in the trade center attacks, said: ''I know if they were here, they'd say, 'Be brave. ... We died to protect freedom.'''

The city's first parade since the attacks came as the United States carried out a second consecutive day of air strikes against Afghan-istan.

In a morning Mass at St. Patrick's Cathedral, prayers were offered for terror victims and heroes at home, and combatants and innocent civilians in Afghanistan. It concluded with the ''The Star-Spangled Banner.''

Around the city, security was tightened. The State Department has warned about the possibility of ''strong anti-American sentiment and retaliatory actions against U.S. citizens and interests throughout the world.''

Onlookers said security along the parade route was similar to past years. And at the city's transportation hubs, visible security was much as it had been in recent weeks: a stepped-up police presence and in some cases limited access to streets running past stations.

A suspicious package at a PATH train station led to nearly an hour's suspension of service between New York and New Jersey on the commuter line.

As she waited for a subway, Shayla Hughes, 26, of New York City, said her biggest fear was ''being blown up in the train station.''

Gov. George Pataki said officials were continually reevaluating the number of police and National Guardsmen needed to protect bridges and tunnels. ''We're clearly at an enhanced level of security ... and we will be for some time,'' Pataki said.

On Monday, guardsmen patrolled the Brooklyn Bridge, including its pedestrian walkways. Armed officers were posted outside city, state and federal buildings.

At the parade, Giuliani was clearly the focus of attention -- many spectators chanted, ''Rudy!'' as he passed. He marched at various times with Pataki, Sen. Hillary Rodham Clinton and Republican mayoral candidate Michael Bloomberg.